Can I rent the house that I bought on FHA Loan in California?

Hi there,

I bought a house just 5 months back on FHA loan and now I have to move because of a new job. I see that FHA houses can't be given out on rent? Are there any exceptions to that? because I still want to own this house but want to put it on Rent as I can't live here. Please let me know what are my options?


What are my options? I didn't buy this for Investment. So does the bank charge a penalty or what? or should I just rent it out anyway. I mean, the bank is getting the payment anyway and I am not buying a 2nd house either. So what are my options?

9 Answers

  • Anonymous
    8 years ago
    Best Answer

    Mortgage fraud is a felony. You need to refi to a conventional loan before you rent.

  • Bob
    Lv 6
    8 years ago

    They don't make FHA loans to purchase rental properties and they will call your loan if you get caught trying to do that but you can rent the house if your new job is more than a reasonable commuting distance from the home. Becoming a landlord is not for amateurs. Before you do you should find out what is involved from someone with property management experience. You could even get another FHA loan to purchase another home to live in if your income will support both payments. This is one of only a few sets of circumstances under which they will allow you to have two FHA loans at the same time. A link to the HUD website covering this is posted below.

    You may also want to check with your new employer to see if they offer any relocation assistance that might help you sell the home and avoid taking a loss.

    Make sure you contact the lender to let them know what is going on. There is not a penalty for doing this if you have a legitimate reason. You will probably be required to change the coverage on your home owners insurance policy on the current home since it will no longer be a primary residence.

    Source(s): Licensed Loan Officer in Ohio
  • 8 years ago

    You may want to talk with a HUD home counselor about your FHA loan requirements: (800) 569-4287.

    More than anything, your lender wants to receive your monthly mortgage. And, they know that selling now would be a lot tougher than renting. Good luck.

  • 3 years ago

    properly did you get some specific application alleviation in buying that place? a central authority rebate application or own loan application? if so, could desire to study teh fantastic print there to work out what the barriers are cuz there could desire to be clawbacks for violation of the regulations...get that sparkling first..... you may desire to purchase yet another living house merely fantastic, yet your down paymt will probable be the 20% variety... your credit status/score must be very stable.....the 1st living house would be the two an asset and criminal accountability to you while attempting to circulate nevertheless owe for it....hurts your credit fee cuz of the debt..... be very careful there...get each and every of the information then circulate n do what you are able to/pick to do

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  • godged
    Lv 7
    8 years ago

    Your options are to sell, refi this house into a conventional loan or have the lender call the note due.

    I know you did not intend to make this an investment property, but if you read the terms of your agreement, you cannot use it as such. When you rent it and move, the lender will call the note due and you will have 30 days to pay it off or face substantial penalty.

    Yes, they will find out.

    Source(s): Oregon Realtor
  • Anonymous
    8 years ago

    Yes you can move and yea you can rent it. The intent when you bought it was as a primary residence so there is no fraud involved. It is understood that situations change and FHA won't have an issue wit this. Getting another FHA mortgage may be problematic unless you are being relocated, but you should be good to rent the current one.

    Source(s): Licensed California Mortgage Loan Originator
  • Ryan M
    Lv 7
    8 years ago

    Yes there are exceptions, however "I can't live here" is not one of them. Unless you are in the military and deployed are SOL. The point of the FHA program is NOT to help people buy investment properties.

  • 8 years ago

    You must live there for at least 2 years, to do otherwise would be Mtg fraud.

  • 8 years ago

    I recommend that you talk with an Attorney who has a great deal of successful experience with Real Estate Law.

    If you cannot afford an Attorney then I recommend that you contact the local Legal Aid Society. The Attorneys with the Legal Aid Society are excellent and they do not charge any money for their services.

    I do know several people who bought their homes with FHA mortgages who in fact did turn their houses into rental properties later when they had to move but either could not sell their homes or it would have been disadvantageous financially to sell their homes.

    The biggest problem that I have heard of anyone encountering is that they could not get an FHA loan to buy their next house.

    You would probably lose money if you tried to sell your house in this market. You would probably have to bring a lot of cash to close to make up for the difference in the selling price and what you owe on the FHA loan. I agree that it does not make sense for you to sell your house and the better option would be for you to keep the house and rent it out.

    I have never heard of a case where FHA objected to someone later turning their home into a rental property.

    However, to be safe I recommend that you consult an Attorney first, so you at least know what FHA could do if they objected and be ready to counter the FHA if they do object.

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